RAM KUMAR JALAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) UNDER S. 66(2) of the Indian IT Act, 1922, the following question is referred to us for our determination:

(2.) THIS application of the assessee to raise additional grounds of appeal was disallowed by the Tribunal. The Tribunal pointed out that none of the relevant facts on the basis of which the additional grounds were sought to be urged was to be found in the order of assessment passed by the ITO or the order passed by the AAC. Actually, the grounds which were sought to be urged by way of additional grounds of appeal were not even raised before the ITO or the AAC. In fact, the assessee itself had filed the return on the footing that the said sum was a revenue receipt. The Tribunal found that the case of the assessee had to be decided on the facts on record and it was not possible to go into the additional grounds of objection unless fresh investigation of facts was made at the stage of the second appeal before the Tribunal. On that footing the Tribunal rejected the application of the assessee to urge additional grounds of appeal. The question above referred to arises from this order of the Tribunal.

(3.) BY the additional grounds of appeal the assessee wanted to contend that a sum of Rs. 7,93,837 received by it was not a revenue receipt but a capital receipt and both the ITO and AAC erred in holding that it was a revenue receipt. The assessee in its own return showed that the said amount was a revenue receipt. So there was no question of investigation before the ITO on the ground that it was a receipt and was not, therefore, liable for payment of tax, nor was such a plea raised before the AAC. It may be pointed out that when the ITO initially passed the assessment order and when the AAC passed the order in appeal, even the order of the Tribunal in the case of Jalan Trading Co. Private Ltd. was not there. In fact such an order was passed later on. Thus, the Tribunal was right in rejecting the application of the assessee to raise additional grounds of appeal, because, on the facts of the case of the assessee, there was no material on record on the basis of which the additional grounds were sought to be urged. In the absence of any material before the ITO or the AAC or in the absence of any plea before them in that behalf it was impossible for the Tribunal to hold that either of the two authorities erred in taking the view which they took.